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Wind Power Sold to Utility

August 15, 2008

By GEORGE HOHMANN

Appalachian Power Co., which has been focused throughout its 102 years on generating electricity with coal, today announced its first- ever deal to purchase power generated by a West Virginia wind farm.

The American Electric Power subsidiary said it has agreed to purchase all of the power generated over the next 20 years by the first phase of the Beech Ridge Energy wind farm, which is under development in Greenbrier County.

The deal with Beech Ridge is Appalachian Power’s third long-term wind-energy purchase agreement but its first with a wind farm in its service territory. Appalachian serves about 500,000 customers in southern West Virginia and about 500,000 customers in Virginia.

“Wind and other renewables are becoming an integral part of the diverse power generation mix necessary to meet our customers’ electricity needs,” said Michael Morris, American Electric Power’s chairman, president and chief executive officer, in a prepared statement.

“Adding these renewable generation resources, along with our plans for new base load generation using clean coal and other technologies, positions us to continue to meet our customers’ needs while also reducing our carbon footprint.”

Dana Waldo, president and chief operating officer of Appalachian Power, said in a prepared statement, “The agreement to purchase power from a wind generation facility located in West Virginia is an important development for the state and for our company. It aligns with a commitment to renewable energy made by West Virginia Gov. (Joe) Manchin in a speech last week and with legislation signed by Virginia Gov. (Tim) Kaine last year.”

American Electric Power owns power-generating stations with a capacity of nearly 38,000 megawatts. The first phase of Beech Ridge Energy’s wind project is expected to have an output of between 100 and 147 megawatts. That’s enough to supply the needs of about 32,000 customers, said company spokeswoman Jeri Matheney.

Coal-fired power plants account for 73 percent of American Electric Power’s generating capacity, while natural gas represents 16 percent and nuclear 8 percent. The remaining 3 percent comes from wind, hydro, pumped storage and other sources.

The addition of Beech Ridge’s wind energy won’t change American Electric Power’s portfolio mix much. But Morris pointed out that it does bring the company’s long-term renewable-energy purchase commitments up to 422 megawatts in the year since American Electric Power established a 1,000-megawatt goal.

The company announced the goal last year as part of a strategy to address its greenhouse gas emissions. The addition of wind power to American Electric Power’s energy portfolio avoids an increase in greenhouse gas emissions that would otherwise occur if the company used traditional fossil fuel generation to meet growing customer demand.

“When you add our wind capabilities that were in place prior to the establishment of the goal (310 megawatts of wind generation in Texas owned by AEP and 367 megawatts of long-term wind-energy purchase agreements in Texas and Oklahoma), it’s clear that our energy portfolio now includes a significant amount of renewable energy,” he said.

The $300 million Beech Ridge project is under development. It is expected to go online by March 31, 2010. Beech Ridge is a subsidiary of Invenergy Wind Limited Liability Co., Chicago.

Pricing terms of American Electric Power’s deal with Beech Ridge Energy were not disclosed. The agreement must be approved by the West Virginia Public Service Commission and is subject to an extension next year of the federal production tax credit for renewable energy.

Charleston-based Appalachian Power is the largest taxpayer in the state and the fifth largest employer. Appalachian Power’s corporate parent, American Electric Power, is headquartered in Columbus, Ohio.

Contact writer George Hohmann at business@dailymail.com or 304- 348-4836.

Originally published by DAILY MAIL BUSINESS EDITOR.

(c) 2008 Charleston Daily Mail. Provided by ProQuest LLC. All rights Reserved.




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